Andrew Ross Sorkin is the co-anchor of Squawk Box on CNBC, founder and editor of Dealbook at the New York Times, and the author of “Too Big To Fail.” He joins Big Technology Podcast to discuss the wild state of the market, the rise of meme stocks, along with bitcoin, SPACs, Big Tech antitrust, Elon Musk, and when the party will come to an end.
Alex Kantrowitz: Andrew, welcome to the show.
Andrew Ross Sorkin: Thank you for having me. I am a longtime fan and listener, first time on the show.
What’s your sense of the market’s rationality right now, or lack thereof?
Well, we have to break apart what we’re describing as the market for a second. There’s one part of the market that is this meme stock driven explosion, and that is something unto itself. Then there is the market excluding all of that. And then there is this thing we’ll call the “real economy” over here. They’re all potentially interrelated, or you’d like to think.
The stock market unto itself — meme stock excluded for a second — there’s lots of excitement still about where we are, but you’re even starting to see what they call, “the great rotations,” or people moving out of technology and into travel, because they think everyone’s going to travel again and all sorts.
That seems at least rational. And we can debate about whether there’s going to be more infrastructure spending or what the Federal Reserve is going to do. But what’s really caught everybody’s excitement or the meme stocks, the AMC apes and the GameStop hysteria. And don’t forget Bed Bath & Beyond or some of the others that are completely and utterly divorced from reality, Alex.
It’s a bunch of people who have an idea, I don’t the idea is about fundamental investing, it’s about demonstrating that they can push up the price of a stock. I hate to use the word manipulation, and people will get very angry if you put it in this context. But I think there’s a group of people who would like to press the price of a stock up. And you’re seeing it in this very unique social media enabled, mobilized moment.
Some of those people are doing it because they actually believe in the stock. Most of them are doing it to prove something. Other people are doing it, hopefully just to make a lot of money because they think they can ride a wave. There’s a lot of elements to this.
There’s an argument that this is totally normal, that all stocks are traded on momentum and stories. And so what if a GameStop, or what if an AMC, is traded on a story? People are only getting mad when it’s the common person doing it versus traditional investors. What do you think about that?
I don’t buy it. I just don’t buy it. First of all I would love the “little guy,” I even hate that phrase, to be wildly successful and to beat the man. I would love that. I’m not even sure that’s…